For iGaming operators, losing deposits, or even worse losing new players who have a challenge making a first-time deposit, is always a bitter pill to swallow. In such a competitive market, acquisition costs for new players are constantly creeping upwards, through increasingly expensive promotional offers and sign-up bonuses, and spiralling marketing costs. Low cashier conversion rates drive up cost per acquisition (CPA) even further, potentially to unsustainable levels, and slow down revenue growth.
There are several reasons cashier conversion rates can be low, but also strategies operators can employ to optimize their performance if they work with the right payments partner. Here are six factors operators must get right to make their cashier operate effectively:
- Employ smart transaction routing
The most significant issue causing cashier abandonment is declined card transactions. There are several reasons a card transaction can be declined, and many have nothing to do with the player or their available funds. Instead, it is the communication between the player’s card issuer and the operator’s acquiring partner that has failed.
Smart transaction routing tackles this issue. The payments partner supports multiple acquirer relationships (in Nuvei’s case, we work with over 200 local acquirers across the globe), and every transaction is analyzed by a customizable routing engine to determine where to send the payment to ensure the greatest chance of approval.
For example, we enabled Caliente to boost its card acceptance rates by 10% by employing a combined strategy centred around smart transaction routing to local acquirers.
And smart transaction routing has the additional benefit of reducing fees for payment processing as well as improving acceptance rates.
- Offer partial approvals
Sometimes a player will attempt to initiate a transaction with a bank card that exceeds the maximum value their issuer allows. There can be other reasons for this, but in the majority of cases this is because the player doesn’t have enough funds in their bank account to cover the transaction value.
Traditionally these transactions are automatically declined, and this is not uncommon to the iGaming industry. Partial approvals identify these transactions before the issuer declines the deposit and offers the player the option to deposit a lower value that will be approved, or to cancel the transaction altogether.
- Take a strategic approach to Strong Customer Authentication
The phasing-in of Strong Customer Authentication in Europe under PSD2 regulation has been taking place for several years, with the UK mandating full compliance for all online card transactions from May this year. In non-EU regulated countries, card schemes are still pushing 3D Secure 2 (3DS2) – their Strong Customer Authentication-compliant solution – as the new standard protocol to verify online transactions.
Because 3DS2 includes multi-factor authentication, it can create additional friction in the deposit approval process. This has been proven to negatively impact conversion rates. There are some positives – 3DS2 is more effective at identifying and deterring criminal activity – but overall this needs to be balanced with the cost of losing legitimate transactions.
The tool that operators can employ is the exemption rules that can be applied to transactions to bypass the need for multi-factor authentication where the risk that the payment is fraudulent is low. Operators should work with their payments provider to identify a level of risk they are comfortable with and applying the appropriate level of Transaction Risk Analysis (TRA) exemptions to ensure that fraudsters are caught and stopped, but that legitimate players can deposit seamlessly.
- Integrate more payment methods into the cashier
Across eCommerce the consumer payments landscape is evolving, and one key shift is the emergence of alternative payment methods. Our latest consumer research in the U.S. told us cards payments are the preferred online payment method of only 62% of consumers. And many habitually use digital wallets (38%), prepaid cards (14%), eCash (12%), store cards (9%) and online bank transfer (9%) to make online purchases. And the U.S. is more reliant on card payments than most countries; local payment methods such as iDeal, OKTO.CASH, and Bizum are popular in Europe, and Boleto, SafetyPay and Pix are popular in Latin America.
As well as having preferred alternative and local payment methods, consumers are increasingly prepared to walk away when they cannot use them. To avoid high rates of checkout abandonment, operators need to offer all the relevant payment methods in every market they are live in.
And in iGaming, alternative payment methods play another important role. If a card transaction is declined, operators with a wide selection of deposit methods can automatically prompt other payment methods to avoid losing the player. Operators that don’t will lose the player immediately once the transaction is declined.
- Demonstrate fast withdrawals
A critical factor, and the most important factor, for many iGaming players when deciding whether to deposit or not is making sure they have quick, secure access to their funds when they request a payout. This is particularly relevant in countries that do not have a mature real-time payments network; players simply are not prepared to wait up to three days for their payout to be settled. Assuring them that there are instant agnostic payout methods available when they deposit will prevent abandonments and boost conversion rates.
Nuvei was the first payment provider to bring real-time payouts to the U.S. iGaming industry in 2021 via Instant Bank Transfer. Other real-time withdrawal methods available include instant payouts to cards via Visa Direct and Mastercard Send.
- Enable one click deposits
Reducing friction at the checkout wherever possible will inevitably boost conversion rates. There are a number of ways to do this in addition to making as many transactions as possible SCA exempt. Storing card details in a manner that is compliant with card scheme regulations enables returning player to deposit with a single click. Other payment methods also enable one click deposits; for example, Nuvei Instant Bank Transfer’s exclusive integration with Plaid enables automatic verification and one click payments after the initial transaction.
Quick in-game deposits without having to return to the main cashier, and auto-suggested smart deposit amounts are other cashier functions than can expedite the deposit process and increase conversion rates.
For more information about how to optimize your cashier, and how payments can accelerate your iGaming business, contact us today.